Global-e Reports Third Quarter 2023 Results

PETAH-TIKVA, Israel, Nov. 15, 2023 (GLOBE NEWSWIRE) -- Global-e Online Ltd. (NASDAQ:GLBE) the global leader of Direct-To-Consumer cross border eCommerce enablement, today reported financial results for the third quarter of 2023.

"The results of the third quarter of 2023 once again demonstrate the robustness of our business model, as evident from the top-line growth, improved profitability and our healthy pipeline," said Amir Schlachet, Founder and CEO of Global-e. "We are excited about Shopify Markets Pro going into general availability in the US and remain focused on executing across all our strategic vectors, as we continue to capture the immense greenfield opportunity ahead of us."

Q3 2023 Financial Results

• GMV¹ in the third quarter of 2023 was $839 million, an increase of 35% year over year
• Revenue in the third quarter of 2023 was $133.6 million, an increase of 27% year over year, of which service fees revenue was $62.4 million and fulfillment services revenue was $71.2 million
• Non-GAAP gross profit² in the third quarter of 2023 was $59.3 million, an increase of 36% year over year. GAAP gross profit in the third quarter of 2023 was $56.5 million
• Non-GAAP gross margin² in the third quarter of 2023 was 44.4%, an increase of 290 basis points from 41.5% in the third quarter of 2022. GAAP gross margin in the third quarter of 2023 was 42.3%
• Adjusted EBITDA³ in the third quarter of 2023 was $22.1 million compared to $12.5 million in the third quarter of 2022, an increase of 76% year over year
• Net loss in the third quarter of 2023 was $33.1 million

Recent Business Highlights

• Continued to on-board many new merchants located all around the globe and trading in various verticals, including:
  • European based brands including UK fashion brand Ted Baker, French brand Lacoste+UNDW3, Spanish brand Polin et Moi and Italian luxury brand Paul & Shark
  • US based brands such as Tory Burch, jewelry brand Moon Magic, Guess Watches, women-led fashion brand Frank and Eileen and AG Jeans
  • APAC based brands including the Australian brands Kotomi Swimwear and Hello Molly, Japanese brands Hobonichi and OAO and Korean brand Bsrabbit
  • High-end consumer electronics brand Bang & Olufsen
    
    
    
    
• Expanded activity with existing merchant groups, on-boarding:
  
  
  
  
  • Three new LVMH maisons – Repossi, Emilio Pucci, Patou
  • Purdey of the Richemont group
    
    
• Strategic partnership with Shopify continues to grow:
  
  
  
  
  • Shopify Markets Pro went into general availability in the US in September with volumes starting to ramp up
  • Migration process of all legacy Shopify-based enterprise merchants onto the new native solution isnearing completion.
  • 3^rd party partnership agreement renewed for another year

• Expanded our network of platform partners via a new integration into Wix Commerce
  
  

Q4 and Full Year Outlook

Global-e is introducing fourth quarter guidance and is updating the full year guidance as follows:

	Q4 2023		FY 2023		Previous FY 2023
	(in millions)
GMV (1)	$1,125 - $1,175		$3,493 - $3,543		$3,480 - $3,640
Revenue	$178 - $186		$563 - $571		$570 - $596
Adjusted EBITDA (2)	$31.5 - $36.5		$89.1 - $94.1		$85 - $93

¹ Gross Merchandise Value (GMV) is a non-GAAP operating metric. See "Non-GAAP Financial Measures and Key Operating Metrics" for additional information regarding this metric.

² Non-GAAP Gross profit and Non-GAAP gross margin are non-GAAP financial measures. See "Non-GAAP Financial Measures and Key Operating Metrics" for additional information regarding this metric.

³ Adjusted EBITDA is a non-GAAP financial measure. See "Non-GAAP Financial Measures" for additional information regarding this metric, including the reconciliations to Operating Profit (Loss), its most directly comparable GAAP financial measure. The Company is unable to provide a reconciliation of Adjusted EBITDA to Operating Profit (Loss), its most directly comparable GAAP financial measure, on a forward-looking basis without unreasonable effort because items that impact this GAAP financial measure are not within the Company's control and/or cannot be reasonably predicted. These items may include, but are not limited to, share-based compensation expenses. Such information may have a significant, and potentially unpredictable impact on the Company's future financial results.

Conference Call Information:

Global-e will host a conference call at 8:00 a.m. ET on Wednesday, November 15, 2023.

The call will be available, live, to interested parties by dialing:

United States/Canada Toll Free: 1-877-704-4453

International Toll: 1-201-389-0920

A live webcast will also be available in the Investor Relations section of Global-e's website at: https://investors.global-e.com/news-events/events-presentations 

Approximately two hours after completion of the live call, an archived version of the webcast will be available on the Investor Relations section of the Company's web site and will remain available for approximately 30 calendar days.

Non-GAAP Financial Measures and Key Operating Metrics

To supplement Global-e's financial information presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, Global-e considers certain financial measures and key performance metrics that are not prepared in accordance with GAAP including:

• Non-GAAP gross profit, which Global-e defines as gross profit adjusted for amortization of acquired intangibles. Non-GAAP gross margin is calculated as Non-GAAP gross profit divided by revenues
• Adjusted EBITDA, which Global-e defines as operating profit (loss) adjusted for stock-based compensation expenses, depreciation and amortization, commercial agreements amortization, amortization of acquired intangibles, merger related contingent consideration and acquisition related expenses. Adjusted EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate directly to the performance of the underlying business.

Global-e uses the Non-GAAP measures in conjunction with GAAP measures as part of Global-e's overall assessment of its performance, including the preparation of Global-e's annual operating budget and quarterly forecasts, to evaluate the effectiveness of Global-e's business strategies, and to communicate with Global-e's board of directors concerning its financial performance. The Non-GAAP measures are used by our management to understand and evaluate our operating performance and trends.

Global-e's definition of Non-GAAP measures may differ from the definition used by other companies and therefore comparability may be limited. In addition, other companies may not publish these metrics or similar metrics. Furthermore, these metrics have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Thus, Non -GAAP measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

Global-e also uses Gross Merchandise Value (GMV) as a key operating metric. Gross Merchandise Value or GMV is defined as the combined amount we collect from the shopper and the merchant for all components of a given transaction, including products, duties and taxes and shipping.

For more information on the non-GAAP financial measures, please see the reconciliation tables provided below. The accompanying reconciliation tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this press release may constitute "forward-looking" statements and information, within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including statements or information regarding Global-e's expectations, operations, strategy and Global-e's projected revenue and other future financial and operational results or other characterizations of future events or circumstances, including any underlying assumptions. These forward-looking statements may be identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Global-e believes there is a reasonable basis for its expectations and beliefs, but they are inherently uncertain. Many factors could cause actual future events to differ materially from the forward-looking statements in this announcement, including but not limited to, the ability to retain merchants or the GMV generated by such merchants; the ability to attract new merchants; our expectations regarding our revenue, expenses and operations; anticipated trends and challenges in our business and the markets in which we operate; our ability to compete in our industry; our ability to anticipate merchant needs or develop or acquire new functionality or enhance our existing platform to meet those needs; our ability to manage our growth and manage expansion into additional markets; our ability to establish and protect intellectual property rights; our ability to hire and retain key personnel; costs related to being a public company; our ability to adapt to emerging or evolving regulatory developments, technological changes, and cybersecurity needs; our anticipated cash needs and our estimates regarding our capital requirements and our needs for additional financing; impacts from the COVID-19 pandemic, including variants, and related vaccination roll out efforts; and the other risks and uncertainties described in Global-e's Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 31, 2023 and other documents filed with or furnished by Global-e from time to time with the Securities and Exchange Commission (the "SEC"). The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press release. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

About Global-E Online Ltd.

Global-e (NASDAQ:GLBE) is the world's leading platform enabling and accelerating global, Direct-To-Consumer cross-border ecommerce. The chosen partner of over 1,000 brands and retailers across the United States, Europe and Asia, Global-e makes selling internationally as simple as selling domestically. The company enables merchants to increase the conversion of international traffic into sales by offering online shoppers in over 200 destinations worldwide a seamless, localized shopping experience. Global-e's end-to-end ecommerce solutions combine best-in-class localization capabilities, big-data best-practice business intelligence models, streamlined international logistics and vast cross-border experience, enabling international shoppers to buy seamlessly online and retailers to sell to, and from, anywhere in the world. For more information, please visit: www.global-e.com.

Investor Contact:

Erica Mannion or Mike Funari

Sapphire Investor Relations, LLC

[email protected] 

+1 617-542-6180

Press Contact:

Headline Media

Garrett Krivicich

[email protected] 

+1 786-233-7684 

Global-E Online Ltd.
CONSOLIDATED BALANCE SHEETS
(In thousands)
		Period Ended
		December 31,				September 30,
		2022				2023
		(Audited)				(Unaudited)
Assets
Current assets:
Cash and cash equivalents		$	165,033			$	145,824
Short-term deposits			46,353				88,078
Accounts receivable, net			16,424				13,451
Prepaid expenses and other current assets			51,904				63,850
Marketable securities			16,813				18,963
Funds receivable, including cash in banks			78,125				70,415
Total current assets			374,652				400,581
Property and equipment, net			10,283				9,799
Operating lease right-of-use assets			19,718				22,091
Long term deposits			3,225				3,415
Deferred contract acquisition costs, noncurrent			1,825				2,091
Deferred tax assets			171				-
Other assets, noncurrent			3,739				2,579
Commercial agreement asset			282,963				227,231
Goodwill and other intangible assets			466,024				450,681
Total long-term assets			787,948				717,887
Total assets		$	1,162,600			$	1,118,468
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$	52,220			$	32,505
Accrued expenses and other current liabilities			75,990				82,019
Funds payable to Customers			78,125				70,415
Short term operating lease liabilities			3,245				3,661
Total current liabilities			209,580				188,600
Long-term liabilities:
Deferred tax liabilities, net			6,558				2,872
Long term operating lease liabilities			16,579				17,814
Other long-term liabilities			1,762				1,013
Total liabilities		$	234,479			$	210,299
Shareholders' equity:
Share capital and additional paid-in capital			1,253,093				1,344,904
Accumulated comprehensive income			(1,926	)			(1,982	)
Accumulated deficit			(323,046	)			(434,753	)
Total shareholders' equity			928,121				908,169
Total liabilities, convertible preferred shares and shareholders' equity		$	1,162,600			$	1,118,468

Global-E Online Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2023				2022				2023
		(Unaudited)								(Unaudited)
Revenue		$	105,556			$	133,605			$	269,184			$	384,545
Cost of revenue			64,754				77,089				166,848				227,263
Gross profit			40,802				56,516				102,336				157,282
Operating expenses:
Research and development			22,224				24,883				57,508				72,399
Sales and marketing			52,883				53,643				153,508				158,279
General and administrative			18,926				13,591				45,537				40,608
Total operating expenses			94,033				92,117				256,553				271,286
Operating profit (loss)			(53,231	)			(35,601	)			(154,217	)			(114,004	)
Financial expenses, net			10,890				(3,405	)			11,876				(251	)
Loss before income taxes			(64,121	)			(32,196	)			(166,093	)			(113,753	)
Income taxes			430				895				841				(2,046	)
Net loss attributable to ordinary shareholders		$	(64,551	)		$	(33,091	)		$	(166,934	)		$	(111,707	)
Basic and diluted net loss per share attributable to ordinary shareholders		$	(0.41	)		$	(0.20	)		$	(1.07	)		$	(0.68	)
Basic and diluted weighted average ordinary shares			158,792,119				164,904,339				156,700,221				163,924,915

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2023				2022				2023
		(Unaudited)								(Unaudited)
Operating activities
Net profit (loss)		$	(64,551	)		$	(33,091	)		$	(166,934	)		$	(111,707	)
Adjustments to reconcile net profit (loss) to net cash provided by operating activities:
Depreciation			421				412				1,015				1,299
Share-based compensation expense			9,025				11,716				29,797				32,780
Commercial agreement asset			37,432				37,433				111,615				113,018
Amortization of intangible assets			8,695				5,092				21,360				15,343
Changes in accrued interest and exchange rate on short-term deposits			-				221				-				(488	)
Changes in accrued interest and exchange rate on long-term deposits			(723	)			89				(717	)			(111	)
Unrealized loss (gain) on foreign currency			3,715				1,850				11,294				1,110
Accounts receivable			2,672				644				7,393				2,973
Prepaid expenses and other assets			7,854				(6,449	)			3,128				(11,796	)
Funds receivable			(11,902	)			(4,592	)			8,223				(2,036	)
Long-term receivables			455				680				455			1,160
Funds payable to customers			6,981				358				10,219				(7,710	)
Operating lease ROU assets			677				736				2,132				2,444
Deferred contract acquisition costs			(209	)			(52	)			(684	)			(435	)
Accounts payable			(3,488	)			1,663				(1,225	)			(19,715	)
Accrued expenses and other liabilities			3,633				10,743				(909	)			5,280
Deferred taxes			(179	)			268				(179	)			(3,515	)
Operating lease liabilities			(1,005	)			(1,112	)			(3,990	)			(3,166	)
Impairment of marketable securities			-				-				62				-
Net cash provided by (used in) operating activities			(496	)			26,609				32,055				14,728
Investing activities
Investment in marketable securities			(743	)			(1,598	)			(8,298	)			(2,877	)
Proceeds from marketable securities		-					72			7,910					671
Purchases of short-term investments			(60,472	)			(85,485	)			(91,967	)			(131,987	)
Purchases of long-term investments			-				34				-				(78	)
Proceeds from short-term investments			28,000				52,250				66,400				90,750
Purchases of property and equipment			(1,398	)			(328	)			(7,982	)			(815	)
Payments for business combinations, net of cash acquired			(92,881	)			-				(309,964	)			-
Net cash provided by (used in) investing activities			(127,494	)			(35,055	)			(343,901	)			(44,336	)
Financing activities
Exercise of Warrants to ordinary shares			15			-					58			22
Proceeds from exercise of share options			551				860				1,039				1,725
Net cash provided by financing activities			566				860				1,097				1,747
Exchange rate differences on balances of cash, cash equivalents and restricted cash			(3,715	)			(1,850	)			(11,294	)			(1,110	)
Net decrease in cash, cash equivalents, and restricted cash			(131,139	)			(9,436	)			(322,043	)			(28,971	)
Cash and cash equivalents and restricted cash—beginning of period			267,995				191,987				458,899				211,522
Cash and cash equivalents and restricted cash—end of period		$	136,856			$	182,551			$	136,856			$	182,551

Global-E Online Ltd.
SELECTED OTHER DATA
(In thousands)
		Three Months Ended														Nine Months Ended
		September 30,														September 30,
		2022							2023							2022							2023
		(Unaudited)														(Unaudited)
Key performance metrics
Gross Merchandise Value			621,011							839,056							1,610,763							2,367,976
Adjusted EBITDA (a)			12,537							22,093							26,949							57,557
Revenue by Category
Service fees			47,782			45	%			62,433			47	%			119,054			44	%			172,318			45	%
Fulfillment services			57,774			55	%			71,172			53	%			150,130			56	%			212,227			55	%
Total revenue		$	105,556			100	%		$	133,605			100	%		$	269,184			100	%		$	384,545			100	%
Revenue by merchant outbound region
United States			48,005			46	%			67,303			50	%			109,867			41	%			190,732			50	%
United Kingdom			36,249			34	%			40,876			31	%			98,494			37	%			118,622			31	%
European Union			18,189			17	%			20,980			16	%			55,040			20	%			63,145			16	%
Israel			271			0	%			571			0	%			899			0	%			1,327			0	%
Other		2,842				3	%			3,874			3	%		4,844				2	%			10,719			3	%
Total revenue		$	105,556			100	%		$	133,605			100	%		$	269,184			100	%		$	384,545			100	%

 

(a) See reconciliation to adjusted EBITDA table

Global-E Online Ltd.
RECONCILIATION TO Non-GAAP GROSS PROFIT
(In thousands)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2023				2022				2023
		(Unaudited)
Gross Profit			40,802				56,516				102,336				157,282
Amortization of acquired intangibles included in cost of revenue			2,951				2,796				7,826				8,387
Non-GAAP gross profit			43,753				59,312				110,162				165,669

 

Global-E Online Ltd.
RECONCILIATION TO ADJUSTED EBITDA
(In thousands)
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2022				2023				2022				2023
		(Unaudited)								(Unaudited)
Operating profit (loss)			(53,231	)			(35,601	)			(154,217	)			(114,004	)
(1) Stock-based compensation:
Cost of revenue			79				180				167				453
Research and development			5,667				6,673				16,115				19,304
Selling and marketing			747				1,057				3,212				3,021
General and administrative			2,532				3,806				10,303				10,002
Total stock-based compensation			9,025				11,716				29,797				32,780
(2) Depreciation and amortization			421				412				1,015				1,299
(3) Commercial agreement asset amortization		37,432					37,433			111,615					113,018
(4) Amortization of acquired intangibles		8,695					5,092			21,360					15,343
(5) Merger related contingent consideration		3,027					3,041			9,013					9,121
(6) Acquisition related costs		7,168					-			8,366					-
Adjusted EBITDA			12,537				22,093				26,949				57,557